Tag: District of Columbia

John C. Malone, CEO and Chairman of Discovery Holding Company, agreed to pay a $1.4 million civil penalty to settle Federal Trade Commission charges that he violated the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) in connection with acquisitions of Discovery shares in 2005 and 2008. The FTC alleged that Malone failed to file the required notice in 2005 after buying Discovery shares, and then in 2008 purchased additional Discovery shares before the expiration of a waiting period required by the HSR Act.

The FTC authorized a lawsuit to block CSL Limited’s proposed $3.1 billion acquisition of Talecris Biotherapeutics Holdings Corporation, charging that the deal would would substantially reduce competition in the U.S. markets for four plasma-derivative protein therapies – Immune globulin (Ig), Albumin, Rho-D, and Alpha-1. These therapies are used to treat patients suffering from illnesses such as primary immunodeficiency diseases, chronic inflammatory demyelinating polyneuropathy, alpha-1 antitrypsin disease, and hemolytic disease of the newborn. In approving the administrative complaint seeking to block the deal, the Commission also authorized the staff to seek a preliminary injunction in federal district court in Washington, D.C., to stop the transaction pending completion of the administrative trial.  Following the FTC's lawsuit to block the transaction, CSL Limited announced that it would not proceed with its proposed acquisition.

Drug maker Bristol-Myers Squibb Company (BMS) agreed to pay $2.1 million – the largest fine allowed by law – for failing to inform the FTC of agreements reached with Apotex, Inc., regarding potential generic competition to its blockbuster drug Plavix. BMS’s conduct violated a 2003 FTC Order and the Medicare Modernization Act, which requires that certain drug company agreements be accurately reported to both the Commission and the U.S. Department of Justice. The complaint alleges that BMS failed to disclose that, as part of a patent settlement in which Apotex agreed not to launch its generic version of Plavix for several years, BMS also orally stated, among other things, that it would not compete with Apotex during the first 180 days after Apotex did market its new generic drug.

In November 2008, the Commission authorized staff to file a complaint in Federal District Court, charging that the acquisition of CCC Information Services by Mitchell International, a transaction valued at $1.4 billion, would be anticompetitive in the market for “estimatics”, a database system used by auto insurers and repair shops to generate repair estimates for consumers. According to the complaint, the transaction would also harm competition in the market for total loss valuation (TLV) systems, used to inform consumers when their vehicle has been totaled. The transaction would create a new entity with well over half of the market share for these systems, allowing for unilateral price increases, and facilitating coordination among the remaining smaller competitors in the market. The Commission concurrently issued an administrative complaint. On March 9, 2009, the US District Court for the District of Columbia ordered a preliminary injunction and temporary restraining order preventing the parties from consummating the transaction pending a full administrative trial on the merits. On March 13, 2009, since the respondents announced that they decided not to proceed with the proposed merger the Commission dismissed the Administrative Complaint.

The Commission issued an administrative complaint to challenge Oldcastle Architectural’s (a subsidiary of CRH) proposed $540 million acquisition of Pavestone Companies as anticompetitive in the US market for drycast concrete hardscape products sold to retailers such as The Home Depot, Lowe’s, and Wal-Mart Stores. According to the complaint, the acquisition would reduce competition by combining the only two companies capable of the national manufacture and sale of these heavy products, which include concrete pavers, segmented retaining wall blocks, and concrete patio products, due to the difficulty in distribution of such products, and the fact that both Oldcastle and Pavestone already possess large distribution networks. The acquisition as proposed would result in Oldcastle gaining a 90% market share for the manufacture and sale of these drycast products to home centers in the United States. The Commission also authorized staff to file a complaint in federal court seeking a temporary restraining order and preliminary injunction to prevent consummation of the proposed transaction, but the respondents decided not to proceed with the proposed merger and the Commission dismissed the administrative complaint.

The Commission sought a federal court temporary restraining order and preliminary injunction, and issued an administrative complaint, against Whole Food Market, Inc.’s proposed acquisition of Wild Oats Markets, Inc. According to the complaint, the approximately $670 million deal raised competition problems in 21 local markets where Whole Foods and Wild Oats both operated stores and were each other’s closest competitors among premium national and organic supermarkets. The district court granted the TRO, but subsequently denied the preliminary injunction, concluding that the merger’s likely effect would not be substantially to reduce competition in violation of Section 7 of the Clayton Act. The Commission appealed the district court’s ruling on grounds that the lower court failed to apply the proper legal standard that governs preliminary injunction applications by the Commission in Section 7 cases. The appellate court remanded the case to the district court for further proceedings to determine if the proposed $670 million deal raised competition problems in numerous local markets where Whole Foods and Wild Oats both operated premium natural and organic supermarkets. In a settlement on March 6, 2009, Whole Foods agreed to sell the name brand of Wild Oats, along with 32 of the company’s stores.

There is a related administrative proceeding.

There is a related administrative proceeding.

The Commission authorized staff to seek a preliminary injunction to block the merger of Nestlé and Dreyer’s Grand Ice Cream, Inc. on grounds that the merger would reduce competition in the highly concentrated market for super-premium ice cream. Nestlé markets super-premium ice cream under the Häagen Dazs brand; Dreyer’s super-premium brands include Dreamery, Godiva and Starbucks. Before the complaint was filed in a federal district court, the parties agreed to enter into a consent agreement to settle the charges. The final order requires the divestiture of super-premium ice cream brands Dreamery and Godiva, the Whole Fruit sorbet brand, and Nestlé’s distribution assets to CoolBrands International, Inc.

The Commission authorized staff to file a complaint to block Arch Coal, Inc.’s proposed acquisition of Triton Coal Company, L.L.C. from New Vulcan Holdings, L.L.C. on grounds that the acquisition would increase concentration and tend to create a monopoly in the market for coal mined from the Southern Powder River Basin and in the production of 8800 British Thermal Unit coal. On April 1, 2004, the complaint was filed in the U.S. District Court for the District of Columbia; the court denied the FTC's motion for a preliminary injunction. On June 13, 2005 the Commission announced that it was closing its investigation, saying that it will not continue with administrative litigation challenging the deal.

General Electric was permitted to acquire InVision Technologies, Inc. with conditions that it divest InVision's YXLON x-ray nondestructive testing and inspection equipment to a Commission approved acquirer. According to the complaint issued with the consent order, the two firms are direct competitors in a highly concentrated market. The consent order protects competition in the United States market for specialized x-ray testing and inspection including standard x-ray cabinets; x-ray systems equipped with automated defect recognition software; and high-energy x-ray generators.

A consent order allowed GenCorp Inc. to acquire Atlantic Research Corporation while requiring the divestiture of Atlantic’s in-space liquid propulsion business within six months of consummating the transaction. According to the complaint issued with the consent order, the transaction as originally planned would have lessened competition in the United States in four different types of in-space propulsion engines: monopropellant thrusters; bipropellant apogee thrusters; dual mode apogee thrusters; and biopropellant attitude control thrusters.